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THE TOP 100: Amazon Still King In the Online Video Jungle

2 May, 2002 By: Holly J. Wagner

This week, Hive4Media will bring you Video Store Magazine's Exclusive Annual Research bonanza, the Top 100. Two parts of this unique research series will appear every day this week in this space. Today we continue the series with a look at the Top 10 etailers and the Top 10 international video retailers. To view supporting charts and tables, see your copy of Video Store Magazine!

The video shakeout among etailers has followed the same path as the rest of retail, both online and off, over the past two years with two exceptions: Netflix.com has gained enough popularity to propel it up two slots, and Buy.com has been rising like a dot-com phoenix from its own ashes.

Amazon.com remains the 800-pound gorilla of etail, topping the list of video etailers again this year, but the landscape is shifting just like in all its other areas of business. As dot-coms drop off like dot-flies, the fiercest competition comes from the brick-and-clicks that can sustain Web operations because of their physical presence.

Brick-and-clicks that did not make the list last year joined it in force this year, with Wal-Mart.com in fifth place and BestBuy.com, Target.com and Costco.com at numbers seven, eight and nine, respectively. At No. 11, Kmart's bluelight.com was a near miss.

Meanwhile, most of the pure-play etailers have slipped, with the notable exception of online rental service Netflix.com. The company recently announced its initial public stock offering, a move revived after market conditions forced a postponement last year.

Buy.com's road to recovery has meant jettisoning excess baggage, namely areas of business outside the home electronics/entertainment arena, that were putting a drag on the company's core business, said COO Brent Rusick.

“The majority of our revenue comes from technology products,” he said. “We've eliminated a lot of divisions that were not core to the actual business. We had undertaken a lot of business initiatives, but we've exited travel, sporting goods and office supplies.”

While Amazon.com reigns supreme in nearly every etail category, Rusick said Buy.com is positioned to respond to the market more quickly because it operates a pass-through business without warehouses, inventory or the overhead Amazon demands.

“We partner with the largest and best distributors in every category we're in,” Rusick said. “We have world-class fulfillment systems.”

Buy.com caters to tech-savvy early adopters, so the company is “definitely stronger in DVD than VHS,” Rusick said.

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